CIPFA is to take over the Audit Commission’s counter-fraud work when the watchdog is wound up next year and establish a national centre of excellence in counter-fraud, it has been announced today.

Further details were set out today on where the commission’s functions will transfer. CIPFA has been asked by ministers to take over counter-fraud areas including the publication of the annual Protecting the public purse report.

The new centre will work with partners from across the public sector to become a global authority on counter-fraud for public services. This will also include publication of a counter-fraud manual, accredited training and the sharing of good practice when the centre opens in June 2014.

CIPFA chief executive Rob Whiteman said tackling fraud and protecting the public purse were key public concerns.

‘It is fantastic news that the Audit Commission will be able to transfer their current work on fighting fraud to CIPFA’s new Counter Fraud Centre,’ he said.

‘The new centre will be a global leader in protecting public resources from fraud. It will fight to make sure that every penny of public money is accounted for and spent on the services that communities need.’

Audit Commission chair Jeremy Newman said the counter-fraud work would transfer to safe hands.

The commission’s annual Fraud and Corruption Survey provided the backbone for the commission’s Protecting the public purse analysis for the past six years, he said.

‘We are pleased that the valuable work of the commission and our specialist counter-fraud staff are transferring to CIPFA. We wish them all well for the future and are pleased that their important work will continue.’

It was also confirmed today that the Local Government Association would take over management of the Audit Commission’s £85m outsourced audit contracts following abolition.

The decision by the Department for Communities and Local Government will see the LGA create an independent private company to act as the transitional authority for the contracts. These are due to end in 2017, but could be extended for three years.

Once the deals expire, local public bodies will be required to appoint their own auditors and manage their contracts individually or collectively.

Local government minister Brandon Lewis said today’s announcements were part of changes to local audit that would save &#163;1.2bn over ten years.

LGA chair Sir Merrick Cockell added that the LGA would attempt to continue collective procurement of local audit if councils wished this.

‘We believe that this will continue to provide the public sector nationally with the best prices for external audit,’ he added.

Newman said the selection of the LGA was a ‘bold move’ by government as it would require the creation of a new private company in order to establish the necessary independence.

‘This company will be taking on the commission’s statutory functions, which are required to manage the audit contracts of nearly 11,000 public organisations, spanning local authorities, police, health, fire bodies and rescue services, as well as smaller bodies such as parish councils,’ he said.

‘The private company will need to maintain the integrity of the contracts, manage conflicts of interest and resolve any disputes between auditors and audited bodies. Given that all these aspects must to be operational from day one, there is a lot to be done and this is an ambitious timetable.’

Newman added the commission’s also believed collective procurement would likely offer the best value for money beyond the current deals.

It had already been announced that the National Audit Office would take over the statutory responsibility to produce and maintain the Code of Audit Practice and issue guidance to auditors, while the commission’s National Fraud Initiative will move to the Cabinet Office.

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